PolyaLesova

SAN FRANCISCO (MarketWatch) -- Crude futures fell Monday to close at their lowest level in almost seven weeks, tallying a loss of more than 7% during a losing streak that's spanned six sessions.

Traders were betting that U.S. data, due later this week, will reveal ample supplies of crude and gasoline inventories may have even declined.

Crude oil for June delivery fell 46 cents, or 0.7%, to close at $61.47 a barrel on the New York Mercantile Exchange after a low of $60.90. The contract hasn't traded or closed at a level this low since March 21.

It "looks like some [supply] estimates have builds or only small draws likely this week," said Jason Schenker, an economist at Wachovia Corp. "That price is bearish."

The Energy Department and American Petroleum Institute will release separate data on petroleum supplies Wednesday morning.

Wachovia expects the data to show a climb of 1 million barrels in crude supplies, a decline of 500,000 barrels in motor gasoline supplies, and a rise of 250,000 barrels in distillate inventories.

John Kilduff, an analyst at Man Financial, predicts an across-the-board rise -- 2.2 million for crude, 900,000 barrels for gasoline and 1.25 million for distillates.

Ahead of the latest supply figures, the June crude contract already has lost a total of $4.53, or 6.8%, since April 27.

"Rising U.S. crude-inventory levels helped weigh on prices last week, but with U.S. gasoline stocks below average and continued trouble in Nigeria, the world's eighth-biggest oil exporter, there is a limit to the market's downside," said analysts at Action Economics, in a research note Monday.

Ups and downs

John Person, president of NationalFutures.com, attributed the recent price weakness to "massive hedge-fund liquidation." He points out that the Commodities Futures Trading Commission report shows non-commercial traders are long by a net 65,000 contracts and commercial traders are net short.

"This may be part of what is driving prices lower today," he said in e-mailed comments.

At the same time, he said, "last week's tensions eased regarding Iran's nuclear program and as refineries come back on line, we are expecting gasoline supplies to build. Crude-oil inventories have climbed in recent weeks, so there is plenty of [inventory]. ... [And] if refineries do get back up to speed, we will potentially see gasoline builds in the next few weeks."

Even so, Person said he doesn't expect a massive decline in prices or any break below $58.

"We still have a heightened security alert due to the ongoing conflict in the Middle East, and demand is strong across the globe; now we are soon entering hurricane season," so prices will likely bottom out within the next two weeks, Person said.

Gasoline record

Meantime, consumers continued to worry about rising retail prices for gasoline.

"The Lundberg Survey has rocked the nation as it released its much-anticipated report on retail gas prices," said Phil Flynn, a senior analyst at Alaron Trading. "The survey reported that gasoline prices shattered the record for the all-time high, hitting the not-adjusted-for-inflation high of a painful $3.07 a gallon for self-serve regular."

The previous high was from August of last year at $3.03, he said.

"Still with retail prices soaring higher, the reformulated-gasoline futures started to look a bit tired," Flynn said. "Traders were taking profits as the contract looked way overbought."

Reformulated gasoline for June delivery fell 1.2%, or 2.68 cents, to close at $2.1896 a gallon in New York Monday. It touched $2.15, a low not seen since April 24.

Refinery maintenance and repairs have contributed to price gains at the retail level.

"Clearly, while these refinery repairs are necessary, the disruptions are detrimental to pricing at a time when the summer-driving season draws closer each day," said Anthony Sabino, a professor of law at St. John's University, whose practice includes oil and gas law.

"Nonetheless, the rising prices reflect somewhat of a 'panic' premium that is really unnecessary," he said in e-mailed comments. "There seems to be unjustified anxiety about supply, which while tight, is still there -- and does not factor in a lessening of demand that higher prices will compel."

Falling short

AAA's Daily Fuel Gauge Report pegged the average price for a gallon of regular gasoline at $3.035 Monday. That's up almost 11% from a month ago, but short of the record $3.057 seen on Sept. 5, 2005. See the data.

Tom Kloza, chief oil analyst at the Oil Price Information Service, which provides the gasoline data to AAA, doesn't expect prices to reach a record Tuesday.

"Most of the spot markets, and wholesale prices, are down some 10 to 15 cents a gallon since last Thursday or so," he said in e-mailed comments. "It's too early to say that this is a trend, but today may represent the highest number until hurricane season."

About six stats are at all-time records, and places such as California, Oregon and Washington are so far above their record highs, and it has lifted the country's average price, he said. "Most of the country is under $3 a gallon, and may not see that number in the next couple of months," said Kloza.

So, by the end of the week, prices may back off a little, and "my hunch is that we won't break the record in the next few days," he said.

Still, "the one-two punch of $3 gasoline and the housing market woes is weighing on the consumer and, by corollary, the economy," said Man Financial's Kilduff in a note to clients. "This may enable June and July to be down months for energy prices."

But "hurricane season and a potential uptick in [the fourth quarter] on holiday sales should provide the impetus for another upswing," he said. So "one of the oldest adages on Wall Street remains more true than ever: buy the dips."

Rounding out the action in the energy markets Monday, June heating oil fell 2.8 cents, or 1.5%, to close at $1.8029 a gallon. June natural gas declined 15.9 cents, or 2%, to finish at $7.779 per million British thermal units.

In related energy news Monday, an explosion has damaged a section of one of the main gas pipelines in Ukraine that exports Russian gas to Europe, the BBC reported, citing Ukraine's emergencies ministry. Read more.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.